The Future is Now

Creating the Sustainable Nonprofit
by Eileen Ruby Setti
Ruby & Associates

Start creating your destiny… before it’s created for you.

In the best of times, managing a business is difficult. There is never enough time to do all the things that need to be done. I know: I was raised in a family business and later joined my siblings to create Ruby & Associates. Our father is an entrepreneur. He and my mother taught us to be honest, fair and above all, to work tirelessly. But it takes more than tireless work; it takes a vision to really move a business forward. From our parents, we learned that the best way to reach a goal is to plan a path to get there. The School of Hard Knocks showed us that the path is often uphill, winding, rocky, lonely and even hidden, but that perseverance, humility and work every day gets you one step farther down that path.

I have witnessed hundreds of nonprofit organizations perform amazing work in their communities. Each is unique, but clear differences exist between organizations that are moving forward toward a vision and those that are not. Some nonprofits are simply not on a path. They seem to just get through the day or week. Their resources and activities are directed to mere survival, while their future is being dictated to them. Many nonprofits are managed this way, and they can survive for years, kept afloat by the sheer will of the board or staff. But eventually, when those crusaders leave the organization, it withers.

On the other hand, some nonprofits are on a path and looking to the horizon. Their leaders have a vision of where the organization is going and make daily decisions that inch them towards their goal. They actively use strategy in their decision making, rather than reacting to whatever comes their way, and their vision is passed on to the next generation. The result is a sustainable organization that serves the community for decades. This is what every nonprofit volunteer, staff and board member wants—an organization that will uphold its mission for years to come.

So how does a nonprofit sustain itself through time? How does it set a vision and work towards it? More importantly, how do you create a path while managing the daily operations of the agency? Though not always easy, sustainability can be created in a nonprofit organization of any size. Some right here in Peoria are making strides at sustainability, and everyone can learn from their example.

Vision and a Plan
The first step to sustainability is creating a vision and a path. This is done through a strategic plan and an implementation plan. A strategic plan is an organized effort to produce fundamental decisions and actions that will shape and guide the future of the organization. The board of directors is responsible for creating a strategic plan because they own the corporation, while senior staff offer input as well.

There are three types of strategic plans: organizational, operational and programmatic. An organizational plan considers the “big stuff”: a shift in mission or scope, a major expansion, or a formal partnership with another organization. A programmatic plan focuses on the services the agency offers and the clients it serves: expanding into a new geographic area, creating a new program or revamping existing programs, for example. Operational plans focus on the administration of the agency and are often ignored by the nonprofit sector, but are crucial to building sustainability. Operational plans consider things like integrating new technology, developing policies and procedures, and creating fund development systems. Quite often, before a nonprofit can consider expanding services, it must create an operational strategic plan.

The Central Illinois Youth Symphony completed its strategic plan this spring. This organization has a big dream of “Transforming Youth Through Music.” I was invited to facilitate the board, executive director and conductors in the planning process. What they realized was they did not have the organizational capacity to support the programming that would “transform youth” on the scale they envisioned. Therefore, we devised an operational strategic plan to build the organization. Though it is a small nonprofit, CIYS is building a mighty base to support its big dreams.

But a strategic plan is just the first step—implementing the plan is what is important. It’s not easy to transform a plan on paper into reality. Organization and accountability are crucial. A calendar with deadlines, assignments and resource allocation must be created and followed. If a deadline is not met, the board chair and executive director must address the issue and rectify it. The nonprofit sector often struggles with this, because volunteers don’t get paid, but this is absolutely wrong, because the mission is too important to neglect. Volunteering for a nonprofit means that you give your best effort, not your worst. Everyone must be held accountable.

Fundraising and Marketing
An organization with dreams of a dynamic future needs funding, and funding a nonprofit has always been an uphill battle. Does any nonprofit professional remember when it was easy to raise money? Probably not. So get over it. It takes hard work and investment to raise money.

A fund development plan identifies the sources of revenue for an organization. A variety of funding streams must be cultivated in order to fuel the mission. The most important source comes from individuals. Every nonprofit already has constituents that believe in the mission—its board and its volunteers—but there are more people in the community who will have a unique affinity for your mission. They must be constantly cultivated through direct mail and personal solicitation. Larger donors should be solicited face-to-face by the executive director and a board member, while a broad base of donors should be solicited at least three to four times a year for gifts through direct mail campaigns. No gift is too small, and every gift deserves a “thank you.”

Private and sometimes government grants should be requested as well. Both sources will require reporting and accounting processes, so the organization must first have the administrative capacity to meet these requirements. I have heard many board or staff members say, “We just need a grant writer and all of our fundraising problems will be solved.” That’s false. It usually requires submitting 10 to 15 grants before one is awarded. There is no guarantee for renewal, and very few grants will fund general operating costs. Grants are not the saving grace of a nonprofit—individuals are. Grants should be considered just one of many funding sources.

Special events should also be part of the fund development plan, but events can be deceiving, as the amount of time and effort required often exceeds the funds that are actually raised at the event. This is especially true for small to medium-sized organizations. However, special events are an excellent way to share the mission with a larger base and cultivate future donors.

A comprehensive fund development plan outlines exactly how much money is expected to be raised from each of these sources, who is responsible, deadlines and resources that are needed. In order to project revenue, the fund development plan becomes part of the budgeting process. It also serves as the basis to track progress toward fundraising goals throughout the year.

Marketing and fundraising go hand in hand. A marketing plan supports fundraising efforts. For example, a nonprofit should have a newsletter that is sent to donors and stakeholders, either by email or regular mail. Speaking engagements are an easy way to market the organization. Board or staff members can present the mission and success stories to local groups. Area newspapers and magazines often have sections for nonprofits to make public service announcements. More and more local nonprofits are even utilizing billboards. The important thing is to get your name and mission out there! The marketing plan will identify a message and how to consistently broadcast it to your community.

There are two keys to fundraising and marketing. First, you have to spend money to make money. This can be difficult because it feels like the organization is taking money away from the program in order to do administrative work. In fact, the opposite is true: you are investing resources into the mission. More money equals more programs. Second, you have to ask. Very few people just write a check to a nonprofit organization out of the blue. I never have, and nonprofits are my life! But when you ask, people will give. They may not give the first time, but they will give.

Ruby & Associates has been working with the IPMR Foundation to build its individual donor base. IPMR is one of the larger nonprofits in the area, but they still have to work to raise money! They are utilizing special events and soliciting major donors to enhance existing programs and create new initiatives. The board is heavily involved in the asking process by writing notes to past donors, meeting with them and accompanying staff to make the final ask for a contribution. Fundraising and marketing work hand in hand. We assisted IPMR in creating marketing materials for the solicitations and developed a simple process to keep them on task and hold everyone accountable. Their work is already paying off!

A Working Board
Leading the charge down the path to the future is the board of directors. This concept may be hard to grasp when thinking about a nonprofit, but the board owns the corporation and is responsible for its health. Therefore, great boards have a broad set of experience and expertise. Some board members should be experts in the program or the mission, but not all. A board also needs skills in fundraising, accounting and finance, human resources, and legal issues.

Both IPMR and CIYS have come to realize this as they push their organizations closer to their vision. A board filled with musicians can only take the Central Illinois Youth Symphony so far. Several years ago, IPMR intentionally diversified its board and has since benefited from a broad range of skills in its leadership. Clear expectations help engage board members into the life of the organization. Frustrated executive directors share with me how their board does not “do anything,” or on the other hand, does “too much.” In almost every case, the organization has no job description or clear direction for board members. Can you imagine interviewing for or working a paid position without a job description? A job on a nonprofit board is no different. Be clear so board members know what to do. A board also needs to be rejuvenated from time to time. New members with new skills and new energy can revive the board and keep the vision alive.

Every nonprofit must determine how its board will function. The Central Illinois Youth Symphony is a smaller organization with limited staff; therefore, its board will tend to help with more of the administrative operations. On the other hand, IMPR is much larger, with an extensive staff, so its board will be less active in daily operations and more engaged in fundraising. The trick is to create a healthy board by clearly outlining how the board will function. There is no one “right” governance style for every organization.

Your Path to Sustainability
Creating a vision for an organization is exciting because it is the ideal dream of a better future. Creating a path and staying on that path is hard work, but it is worth every step because your mission is worth it. Creating a strategic plan, fund development plan and building a great board takes time—it can take years. When I tell organizations this, their eyes glaze over. They cannot fathom how to possibly plan and implement all this “stuff” while managing the daily operations of the agency. My answer: one step at a time. That’s why it takes years. But if you don’t start creating your destiny now, it will be created for you, and you probably will not like it. Your future is now. So get started down your path. iBi

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